GyanGramQuestion
The money multiplier in an economy increases with which one of the following?
PRELIMS 2019 · INDIAN ECONOMY
The money multiplier in an economy increases with which one of the following?
Attempt this previous-year question. The correct option stays hidden until you choose.
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• Correct Answer: B
• The money multiplier increases when banking habits improve, as more cash enters the banking system and the currency-deposit ratio falls.
• Higher CRR and SLR reduce the multiplier by restricting lendable resources.
• Population increase alone does not affect the multiplier without active banking participation.
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